GST investigation cannot be casual: High Court Transfers Fraud Probe to EOW

The petitioner moved the High Court seeking a proper investigation into an FIR lodged in September 2024, alleging misappropriation and unauthorised access to GST portal credentials. Initially, the local police filed a closure report without carrying out any real inquiry. This was later reopened after a protest petition and directions from the Magistrate. Despite clear judicial directions to complete further investigation within a fixed timeline, the Investigating Officer failed to file any report, resulting in continued delays.

The petitioner also alleged that his GST credentials were still being misused during this period. The Magistrate repeatedly sought status updates, expressing concern over the lack of progress. In response, the Inspector-in-Charge admitted through an affidavit that the investigation was still incomplete and revealed that the alleged misappropriation involved around Rs. 4.56 crore. Significantly, the officer himself suggested that the matter be handed over to the Economic Offences Wing for a more effective probe.

Issue Before Court: Whether the inadequate and delayed investigation by local police justified transfer of the case to the Economic Offences Wing.

HC’s Ruling: The High Court found the investigation to be casual and unsatisfactory, particularly given the seriousness of the allegations and the large amount involved. It noted repeated delays, failure to comply with court directions, and the admission by the Investigating Officer regarding the need for a specialised probe.

Considering these factors, the Court held that the matter required a more competent and focused investigation. It therefore ordered transfer of the case to the Crime Branch’s Economic Offences Wing. The Court directed the local police to hand over the case diary and all relevant records within one week. The Economic Offences Wing was instructed to assign a suitable officer and take over the investigation within four days thereafter.

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